Bangladesh and Nepal are now among the top 10 export destinations for India

Noting that India has placed a renewed emphasis on strengthening ties with its neighbouring countries under its Neighbourhood First Policy, Foreign Secretary Harsh Vardhan Shringla on Monday said two success stories of this are Bangladesh and Nepal.

Foreign Secretary Shringla, in his remarks at the Bharat Chamber of Commerce during a discussion on 'Post-Covid Economic Recovery', said Bangladesh and Nepal are now among the top.10 export destinations for India with total exports to these two countries amounting to over 16 billion dollars.

“India has placed a renewed emphasis on strengthening ties with its neighbouring countries under its Neighbourhood First Policy,” he stated.

“This applies not just to working in the political or strategic domains but also to deepening economic ties with our neighbours,” the Foreign Secretary added.

“With sustained focus on reducing barriers to trade and facilitating seamless movement of goods and people, we have been able to see significant enhancement in bilateral trade with some of our key partners in the neighbourhood,” he pointed out.

“The reason I mention this is because, with economic growth in our neighbouring countries and our emphasis on improving trade infrastructure and cross-border connectivity, neighbourhood will provide some of the greatest economic opportunities for the Indian industry,” Shringla further said.

“The Bharat Chamber of Commerce is very placed to enhance our trade and investment ties with our neighbours, particularly Bangladesh and Nepal,” he explained.

“Bangladesh has emerged as our largest trading partner in the neighbourhood and the fifth largest export destination globally,” he informed.

“However, for a country that has been growing at an average annual growth rate of over six per cent for the last one decade, potential for trade with Bangladesh is much higher,” Shringla stated further.

“Bangladesh is also undertaking rapid infrastructure development in the form of airports, seaports and highways,” he explained.

“As Bangladesh’s closest neighbour, the Indian business community has much to offer to Bangladesh in its transformation,” Shringla pointed out.

“I believe more and more of our businesses should open representative offices and subsidiaries in Bangladesh to understand the market better,” he said.

According to the Indian Foreign Secretary, Bangladesh is also on track to graduate out of the Least Developed Country status in 2026.

“As many of the trading arrangements of Bangladesh would change when that happens, India is in discussions with Bangladesh for a Comprehensive Economic Partnership Agreement,” he maintained.

Meanwhile, describing Nepal as a close neighbor and economic partner of India, he noted that the Himalayan nation is India’s ninth largest export market and an important destination for Indian investments.

“Indian firms account for over 30% of the total FDI stock in Nepal, worth nearly USD 600 million. There are about 150 Indian ventures operating in Nepal in manufacturing, services, power sector and tourism industry,” the Foreign Secretary said.

Mentioning that a number of reforms have been undertaken in recent years in Nepal which are expected to improve ease of doing business in that country, he said some upcoming areas that may be attractive for Indian industry include vehicle assembly, hydropower, medicinal and aromatic plants and pharmaceuticals.

He also said that India has also been funding connectivity and trade infrastructure projects to remove the bottlenecks in the trade flow with its neighbours.

“Connectivity can be a force multiplier for improving the flow of trade and people as well as promoting economic integration,” the Foreign Secretary stated further.

“As a recent World Bank study pointed out, India’s exports to Bangladesh could grow by 172% through improved connectivity,” he said.

“Steps like revival of historic rail links – Haldibari-Chilahati being the most recent - establishment of a new rail link between Agartala-Akhaura, commencement of rail based container freight movement and expansion of inland waterway routes have been facilitated in the last couple of years,” Shringla maintained.

“Now, a container cargo can be transported from Mumbai port all the way to Dhaka using railways, and from Patna to various business centres in Bangladesh using waterways. These developments also reduce our current overdependence on land ports like Petrapole,” he said.

“A series of cross-border connectivity project like Integrated Checks Posts and cross-border rail links and roads have also been implemented with Nepal,” the Foreign Secretary added.